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    Nasdaq (NDAQ) Stock May Be 3% Overvalued Following Calypso AI Launch

    Simply Wall St·10/03/2026 09:20:14
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    Nasdaq has delivered a strong 89.6% gain over the past three years, which puts a spotlight on a simple question for holders and potential buyers alike: is today's valuation supported by the returns the business earns on its capital?

    • That 89.6% three year share price rise means a lot of future expectations are now embedded in Nasdaq's market value, so the key issue is whether its capital returns are strong enough to back that history.
    • Fresh moves in areas like Nasdaq Calypso's AI agent framework and the Adenza integration can influence how efficiently the group deploys its balance sheet and, in turn, what it might earn on each dollar of capital over time.
    • If you'd rather focus on earnings, this one's for you. See why Nasdaq's 25.7x P/E tells a different valuation story.

    The issue now is whether the return Nasdaq earns on its capital is high and durable enough to justify where the stock trades today.

    If you are weighing whether Nasdaq's 89.6% three year gain is justified by the returns it earns on its capital, it can help to compare that question across 31 high quality undervalued stocks.

    Is Nasdaq Fairly Priced on Excess Returns?

    The Excess Returns model looks at how much profit Nasdaq generates over and above the return shareholders typically require. On these assumptions, the firm is modeled with a book value of $21.33 per share and a stable EPS of $4.84, with analysts expecting an average return on equity of 20.35%. With a cost of equity of $1.95 per share and an excess return of $2.89 per share, the framework treats Nasdaq as a business that is expected to earn meaningfully more on its equity base than the hurdle rate baked into the model.

    Stable book value is projected at $23.77 per share, which suggests the Excess Returns approach is leaning on sustained profitability rather than aggressive balance sheet expansion to justify a share price around $90.33. Nasdaq Calypso's push into AI agent capabilities fits that story because it targets higher efficiency and potentially richer returns on each incremental project instead of just adding more capital. The Excess Returns projections put Nasdaq's estimated intrinsic value broadly in line with the current share price, so the recent rally leaves less obvious valuation slack for new buyers than three years ago. Find out what Nasdaq could be worth using our Excess Returns estimate.

    The Nasdaq Narrative: What Would Justify Today's Price?

    Simply Wall St Narratives pick up where the valuation puzzle for Nasdaq leaves off by spelling out which paths for growth, margins and earnings would need to play out for the stock to be worth materially more or less than it trades for today. Each one treats fair value as a clear thesis about the business that you can watch over time on Nasdaq's Community page, rather than a single frozen snapshot.

    One of the top community narratives on Nasdaq: 18% undervalued

    "A key factor is that Nasdaq successfully scales its AI and financial crime platforms, tokenization modules, and 23/5 trading data services..."

    Discover why this Narrative puts Nasdaq at 18% undervalued.

    Nasdaq's valuation still hinges on who is steering the ship

    Price and profit metrics only tell you so much about Nasdaq, because the real test is whether the people running it and how they are rewarded truly line up with long term shareholders. See who runs Nasdaq and how they are paid.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.